BILL ANALYSIS �
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THIRD READING
Bill No: SB 407
Author: Hill (D)
Amended: 4/1/13
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-0, 4/3/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez
NO VOTE RECORDED: Liu
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Local government: officers and employees:
contracts
SOURCE : Author
DIGEST : This bill extends specified limits on executive
compensation to any employee not covered by the
Meyers-Milias-Brown Act (Act), who is a deputy chief executive
officer, an assistant chief executive officer, or whose
employment is covered by an employment contract.
ANALYSIS : The Act governs labor-management relations,
although its bargaining and representation procedures generally
do not apply to executive employees. Existing statutes restrict
the compensation that can be offered by local agencies to
employees not covered by the Act.
Last session, the Legislature approved AB 1344 (Feuer, Chapter
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SB 407
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692, Statutes of 2011), which specified local agency
compensation practices, in response to abuse of power
allegations among some local agencies. The bill specified the
following:
Local agencies' governing boards must ratify their executive
employees' contracts of employment in open session, and
cannot call a special meeting for that purpose. Copies of
those employment contracts and settlement agreements must be
publicly available.
Local agencies are prohibited from entering into a contract
that provides for automatic renewal if that contract provides
for an automatic increase in compensation that exceeds a
cost-of-living adjustment.
Employment contracts must include provisions limiting, upon
termination, the maximum cash settlement to be paid to no
more than an amount equal to 18 months' salary. If the
executive's contract has less than a year to run, then the
amount can't exceed the remaining expected salary.
Employment contracts also must include provisions for the
local agency to be reimbursed for any paid leave salary and
the cost of legal criminal defense funded by the agency, if
the officer or employee is convicted of a crime involving an
abuse of public office or position.
This bill extends specified limits on executive compensation to
any employee not covered by the Act, who is a deputy chief
executive officer, an assistant chief executive officer, or
whose employment is covered by an employment contract. Those
limits include:
A prohibition on the automatic renewal of a contract that
provides for an automatic increase in compensation exceeding
a cost-of-living adjustment.
A maximum cash settlement equal to 18 months' salary.
Prohibition on the use of a special meeting by the
legislative body of a local agency to discuss or make
decisions on compensation.
Comments
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According to the Senate Governance and Finance Committee
analysis, this bill is a minor expansion of legislation adopted
last session to address abuse of power practices brought to
light by local agency compensation scandals. This bill extends
existing compensation restrictions to all local agency
executives who work under an employment contract. This bill
furthers the provisions adopted last session and will assist in
the prevention of inappropriate and extravagant rewards to local
agency executives, and reduce the liability of local governments
to provide paid leave and legal defense costs for executives who
are convicted of abuse of power charges.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, there are
unknown state-reimbursable local costs. Costs incurred by many
local agencies are likely to be minimal, but if only 5% of over
6,000 local entities to which this bill applies incur one-time
costs of $1,000 and a successful reimbursement claim is filed,
total statewide General Fund costs would be over $300,000.
AG:k 5/23/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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